Pant the paneling white or a light grey (with white trim) and add shelves over the toilet. Put white 2" blinds on the window and hang a cute mirror to the left of the vanity.

Shelf over toilet (has hooks at the bottom for towels):

It's hard to tell from the photos, but also install curved shower curtain rod. You can find non-rust ones for about $20. I put them in my vacation rentals and it makes a world of difference.

If you go with a light gray for the walls, go for a warm gray or "greige" or else anything that is beige in the room will look dingy. Or go with a pale, pale blue on the walls with white trim to keep nautical effect.

You already have 3 colors in the room that can’t be cheaply or easily changed: the beige paneling in the tub surround and the pale grayish blue in the counter top, and the white appliances. I would Try to find something that goes with all 3 non-changeable colors, and paint the paneled walls, the bathroom base cabinet, with primer then 2 coats of color in a durable satin semi-gloss with a roller texture. Your local paint store might be able to suggest something. They know what is selling in your area and what people are happy with.

Before you paint, take down all the mismatched, dated shelves, towel racks, mirrors, light fixtures, and putty and sand the nail holes before painting. That curtain over the window that catches sink splash back is an unsanitary mess. Buy frosted contact paper and cover over the clear glass for privacy. Depending upon the height of the bottom window, you might only need to cover the bottom. After painting, replace that dark outlet with a white ground-fault detector outlet and new white cover for safety. Then mount a new medicine cabinet with mirror (or just a mirror) to replace that old flat mirror. Put a new LED light to replace that dated light above the toilet. Finish the job with new towel and tissue holders, and shelves above the toilet similar to those suggested by Jamie Ludwig, The pictures were so dark, that I could not tell if you need new vinyl floors. It looks like you also need to replace the ceiling light fixture that is sitting on the counter with the two bulbs. That explains why the photos are so dark. Don’t put curtains back over the window. Buy cheap vinyl mini blinds from the dollar store for the window. People are hard on blinds, so don’t over-invest. Go to the local Habitat for Humanity Restore and try to buy a new toilet tank and matching lid. If you can’t buy toilet parts, you will have to buy a whole new toilet. At the very least, make a wooden lid to cover the top of the tank. The lidless tank is not acceptable. If you are on a septic wastewater system, newer low flow toilets will assure that your wastewater system runs better.

Objective: nearly monochromatic light bright color scheme to make the room look less small and appear to be clean and bright. Don’t overinvest. People can destroy it faster than you can rebuild it.